Universal Insurance (NYSE:UVE) Shares Gap Up After Strong Earnings

Key Points

• EPS beat but revenue missed: Universal reported Q EPS of $2.00 vs. $1.39 expected while revenue was $398.2M vs. $481.1M est., and the stock jumped — opening at $37.50 (prior close $35.18) and last trading around $38.46.
• Dividend announced: The firm declared a $0.16 quarterly dividend (annualized $0.64, ~1.7% yield) with an ex-dividend/record date of May 8 and payment on May 15; the dividend payout ratio is about 10.14%.
• Analyst upgrades and insider activity: Several firms (including Zacks and Wall Street Zen) have upgraded UVE toward "strong-buy" with a consensus target of $40, while Chairman Sean Downes sold 20,000 shares and insiders own about 16.6% of the stock (institutions ~66.6%).

Shares of Universal Insurance Holdings Inc (NYSE:UVE - Get Free Report) gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $35.18, but opened at $37.50. Universal Insurance shares last traded at $38.4620, with a volume of 63,939 shares trading hands.

The insurance provider reported $2.00 earnings per share for the quarter, topping analysts' consensus estimates of $1.39 by $0.61. Universal Insurance had a net margin of 11.41% and a return on equity of 37.28%. The company had revenue of $398.16 million during the quarter, compared to analyst estimates of $481.09 million.

Universal Insurance Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, May 15th. Investors of record on Friday, May 8th will be paid a $0.16 dividend. The ex-dividend date of this dividend is Friday, May 8th. This represents a $0.64 dividend on an annualized basis and a yield of 1.7%. Universal Insurance's dividend payout ratio is 10.14%.

Analysts Set New Price Targets

A number of analysts recently weighed in on UVE shares. Zacks Research raised shares of Universal Insurance from a "hold" rating to a "strong-buy" rating in a research note on Friday, February 27th. Wall Street Zen raised shares of Universal Insurance from a "buy" rating to a "strong-buy" rating in a research note on Saturday, December 27th. Finally, Weiss Ratings reaffirmed a "buy (b)" rating on shares of Universal Insurance in a research note on Monday. One analyst has rated the stock with a Strong Buy rating and two have issued a Buy rating to the company. According to data from MarketBeat, Universal Insurance presently has an average rating of "Buy" and a consensus target price of $40.00.

Insider Transactions at Universal Insurance

In other news, Chairman Sean P. Downes sold 20,000 shares of the company's stock in a transaction dated Wednesday, March 25th. The shares were sold at an average price of $34.60, for a total transaction of $692,000.00. Following the transaction, the chairman owned 1,206,788 shares in the company, valued at $41,754,864.80. This represents a 1.63% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CAO Kimberly D. Campos sold 879 shares of the company's stock in a transaction dated Thursday, March 26th. The shares were sold at an average price of $33.84, for a total transaction of $29,745.36. Following the transaction, the chief accounting officer owned 7,422 shares in the company, valued at approximately $251,160.48. This trade represents a 10.59% decrease in their position. The SEC filing for this sale provides additional information. Insiders own 16.60% of the company's stock.

Hedge Funds Weigh In On Universal Insurance

Several hedge funds have recently modified their holdings of the stock. Mirae Asset Global Investments Co. Ltd. increased its holdings in shares of Universal Insurance by 1.8% during the third quarter. Mirae Asset Global Investments Co. Ltd. now owns 19,526 shares of the insurance provider's stock valued at $514,000 after acquiring an additional 341 shares in the last quarter. Los Angeles Capital Management LLC increased its holdings in shares of Universal Insurance by 1.3% during the fourth quarter. Los Angeles Capital Management LLC now owns 30,712 shares of the insurance provider's stock valued at $965,000 after acquiring an additional 405 shares in the last quarter. Susquehanna Fundamental Investments LLC increased its holdings in shares of Universal Insurance by 5.2% during the fourth quarter. Susquehanna Fundamental Investments LLC now owns 9,674 shares of the insurance provider's stock valued at $327,000 after acquiring an additional 474 shares in the last quarter. Osaic Holdings Inc. increased its holdings in shares of Universal Insurance by 11.3% during the second quarter. Osaic Holdings Inc. now owns 5,249 shares of the insurance provider's stock valued at $146,000 after acquiring an additional 534 shares in the last quarter. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its holdings in shares of Universal Insurance by 4.7% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 13,976 shares of the insurance provider's stock valued at $331,000 after acquiring an additional 630 shares in the last quarter. Institutional investors and hedge funds own 66.61% of the company's stock.

Universal Insurance Trading Up 8.9%

The company has a debt-to-equity ratio of 0.18, a current ratio of 0.52 and a quick ratio of 0.52. The stock has a market cap of $1.07 billion, a price-to-earnings ratio of 6.06 and a beta of 0.69. The company's fifty day moving average price is $33.87 and its 200-day moving average price is $32.44.

Universal Insurance Company Profile

Universal Insurance Holdings, Inc NYSE: UVE is a property and casualty insurance holding company headquartered in Jacksonville, Florida. The company underwrites homeowners and other residential property insurance products to protect against natural catastrophes such as hurricanes, windstorms and fires. It distributes policies primarily through a network of independent agents and brokers, offering coverage for primary residences, secondary homes, condominiums, vacant dwellings and rental properties across its service territory.

In addition to personal lines, Universal provides commercial property and casualty insurance tailored to small businesses and institutional clients.

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